Question

Colin is an insurance adjuster who wants to determine how a driver's automotive insurance monthly premiums are related to the number of miles driven per week; the age of the car, in years; and the number of accidents in which the driver has been involved in the past 5 years. What is the correct format for a multiple regression equation?

Answer 1

A multiple regression equation for this model can be expressed as:

`y=b_0+b_1x_1+b_2x_2+b_3x_3`

Explanation:

To model this problem as a multiple regression equation, we need to define which are the independent and dependent variables.

The dependent variable is the one which we want to predict for any set of independent variables values. This is the case of the driver's automotive insurance monthly premiums.

The driver's automotive insurance monthly premiums is the dependent variable "y".

The independent variables are the ones that explain the dependent variable variation. In this case there are: number of miles driven per week (x1); the age of the car, in years (x2); and the number of accidents in which the driver has been involved in the past 5 years (x3).

Then, a multiple regression equation for this model can be expressed as:

`y=b_0+b_1x_1+b_2x_2+b_3x_3`